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Silicon Valley's 'undertaker' speaks

Specialist consulting firm Sherwood Partners helps shut down companies. This interview gives some insight into how it does its job.

Over on PEHub, Connie Loizos has an interesting interview with Marty Pichinson, the co-founder of Sherwood Partners, a consulting firm that boards hire to efficiently shut down companies.

Pichinson makes some excellent points and is pretty realistic, if a bit dramatic:

You can't determine who to lay off until you understand what your needs are. When you analyze who to cut, you have to say, "Do I need four people in sales or is the one consultant who has better connections better for me?" And do you need full-time salespeople? Some start-ups try to have too many full-time employees when they don't have a full-time business. You have to look at what everyone is doing and how they integrate.

And the value of public relations:

Do you listen to Warren Buffett and strike when there's trouble? Is PR cheaper than advertising? The answer is yes. Are you better to have a third party tell reporters how great your product is? The key is to negotiate. I'm not a believer in cutting public relations if the machine is well-oiled and people are reading about you. It takes three to six months to get public relations up and running. Why throw it away?

Now, do you need an inside marketing person? Probably not at $150,000 a year. Also, outside PR probably has a wider net.

And of course, some drama:

Basically, you've got to make believe that you're on an island and you're going to run out of food. If you've got a dwindling bowl of soup and you've got X number of children to feed, you give them less, or you give everyone their share but you kill off some of your children.

Overall, very interesting and worth a read.